The US Securities and Exchange Commission on Thursday appealed a court ruling which had blocked a deal to fine Citigroup $285 million on the grounds the regulator had let the bank off too lightly. The SEC said the judge\'s call for Citigroup to be forced to admit guilt alongside the fine set \"a new and unprecedented standard\" that will only delay payment and exacerbate investor losses from the bank\'s allegedly fraudulent sale of mortgage securities. The watchdog also said New York federal court judge Jed Rakoff unfairly accused the SEC of agreeing to a \"pocket change\" Citigroup settlement, because the SEC is not empowered to seek much more. The settlement did not cover investor losses. \"We believe the court was incorrect in requiring an admission of facts -- or a trial -- as a condition of approving a proposed consent judgment,\" said SEC enforcement division director Robert Khuzami. \"The court\'s new standard is at odds with decades of court decisions that have upheld similar settlements by federal and state agencies across the country.\" On November 28 Rakoff turned back the SEC\'s request to approve the settlement with Citigroup, which he labeled a \"recidivist\" that viewed such fines as \"pocket change\". He expressed impatience with the number of similar settlements being sent to US courts by US financial regulators that do not require admissions of guilt and do not set penalties high enough to deter future misconduct. The deal, announced October 19, addressed the bank\'s having made lucrative short trading bets against a $1 billion collateralized debt obligation (CDO) -- a package of home loans -- while it was selling the same CDO to investors as a good investment in 2007. Accused of cheating investors, Citigroup finally agreed to pay $285 million in civil penalties and returned profits to settle the charges, without admitting or denying the accusations. Rakoff said such a deal was not in the public interest and suggested the SEC was taking the easy way out. \"If the allegations of the complaint are true, this is a very good deal for Citigroup; and, even if they are untrue, it is a mild and modest cost of doing business,\" Rakoff said in his ruling. Khuzami said the SEC is only allowed to recover Citigroup\'s gains and not seek to match investor losses in a settlement, explaining the $285 million figure. However, on the day of Rakoff\'s ruling, SEC chairwoman Mary Schapiro asked Congress in a letter to increase by more then tenfold the penalties it can set for companies. Investors lost some $700 million in the deal, one of many involving mortgage-backed securities that were at the heart of the 2007-2008 US financial crisis.